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Strategies for Managed Care Contracting
Managed Care contracts can form a complicated and confusing maze, made ever more complex by the continuing expansion of provider networks and the rapidly increasing number of enrolled members. Operational and administrative responsibilities, as well as the extent of financial risk assumed by a medical provider, must be carefully evaluated.

As a first step, persons considering a relationship with a managed care health plan or third party payer should review the strategies to be considered in contract formulation, analyze the companies or organizations that might become partners, and assess how the relationship will evolve.

Other important items to keep in mind when considering a contract relationship with a managed care health plan or third party payer include the following:

  • Carefully consider whether to contract with a plan that works with only one employer. If the employer goes out of business, it may affect the provider's patient load.

  • On specific procedures the provider and plan agree or disagree about, negotiate reimbursement methods and levels and get a written guarantee.

  • When capitation is not the system to be used for reimbursement, a fee schedule should be provided before a contract is signed. In addition, a written guarantee of the effective period for these amounts should be provided.

On specific procedures the provider and plan agree or disagree about, negotiate reimbursement methods and levels and get a written guarantee.

  • When capitation is not the system to be used for reimbursement, a fee schedule should be provided before a contract is signed. In addition, a written guarantee of the effective period for these amounts should be provided.

In addition to understanding key contractual issues, providers must also carefully analyze the companies with which they may elect to do business. Start-up companies may not be ready to respond to the appropriate concerns of providers and thus may not be appropriate partners. On the other hand, these types of companies may be more willing to tailor the contract to meet provider needs and may be seeking providers who possess the type of expertise needed to crate such a product.

Key Contract Elements

  • Identification of the Parties

  • Preamble (Whereas clauses)

  • Definitions

  • Licensure and Certification of Both Parties

  • Services of Physicians

  • Provider Obligations

  • Provision of Services/Carve-Outs

  • Referrals - How to Get Business

  • Utilization Management and Quality Assurance

  • Admissions

  • Physician Credentialing

  • Records
    • Access to Books and Records

    • Confidentiality

    • Report Requirements

  • Quality Assurance Participation (Credentialing)

  • Liability Insurance
    • Professional Liability

    • General Liability

    • Insurance Elements

  • Nondiscriminatory Requirements

  • Practice Access

  • Untoward Events

  • Use of Name

  • Eligibility Requirements

  • Compensation
    • Capitation

  • Withholds and Risk Pools
    • Reward Pools

    • Discounted Fee-for-Service

    • Copayments and Deductibles
    • Billing Forms

    • Claims Processing
  • Coordination of Benefits

  • Terms and Termination
    • Renegotiation

    • Payments After Termination

  • Independent Contractors (Relationship of Parties)
  • Indemnification

  • Notification of Change in Physicians' Staff Privileges

  • Declaration Clauses

  • Amendments

  • Controlling Law

  • Notice

  • Appeals and Dispute Resolution

  • Arbitration

  • Assignment

  • Survival of Action
The Hospital Board at Risk and the Need to Restructure the Relationship with the Medical Staff: Bylaws, Peer Review and Related Solution (Annals of Health Law, Loyola University, June 2003)
Managed Care Under The Gun; Suing Your Managed Care (Managed Care Quarterly, Spring 2001)
The Emperor Has No Clothes (Trustee, July/August 2000)
   
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